I'm probably going to purchase a Kobo Glo, but have a quick question about how well it handles epub (Adobe protected) books rented from libraries. I currently have the Kobo iOS app, and it refuses to resize or restyle the text and it's quite blurry. I hope this is just the iOS app, and the actual Kobo device handles these files well?

I have the Kobo Touch, which works perfectly with library books sideloaded using ADE. I don't normally mess with the fonts (heck, I still use Georgia) but I *have* re-sized the fonts from time to time. Works great.

I have the Kobo Touch. I have downloaded a few books from my local library website. Most viewed and resized fine. I did however have an issue with one book where the book font looked fine on ADE but showed up as unreadable symbols on my Kobo. I tried to resolve with the library but because it read ok on ADE I think it must be an issue with the way Kobo read that particular file. The thread on my issue is here.

However, I think it was probably a one off as I haven't had problems with other books from the library.

I have had several brands of e-readers over the years and I've found all of them can be problematic when sideloading books, public domain or library. The problem is sometimes the ability to change fonts, margin spacing, line spacing etc., will often not work with sideloaded books. This is however a much more common problem with public domain sites than books from a library.

This can be overcome using Calibre but in the case of library books you would need to know how to strip the DRM in order to do a conversion.

In regards to the iOS application, if an ePub or PDF is in Adobe DRM format, then it will be rendered using the Adobe renderer. Non Adobe DRM files are rendered using Kobo's own render.
This is an important distinction, and explains why an Adobe DRM file downloaded for a purchased Kobo book and side-loaded into the iOS application can look different from the same file that would be downloaded if you signed into your Kobo account in the iOS application.

@Sharkus: So what you are saying is that an ePub will render differently before meeting Apprentice Alf (ie with DRM) and after meeting him (no DRM)?

Short answer: Yes

Long answer:
Pre-Alf it will be rendered using the Adobe renderer in the app. Post-Alf it will be an epub and so it will be rendered using the Kobo renderer.

As for kepub (ie; the file that will be downloaded to the app when you sign into your account) vs epub rendering. They will both use the Kobo renderer, however, they might render differently, as the kepub by nature of what it is, has certain CSS applied to it, and the Alf'ed file won't have this CSS.